Correlation Between Athena Technology and Generation Asia

Can any of the company-specific risk be diversified away by investing in both Athena Technology and Generation Asia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Athena Technology and Generation Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Athena Technology Acquisition and Generation Asia I, you can compare the effects of market volatilities on Athena Technology and Generation Asia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Athena Technology with a short position of Generation Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athena Technology and Generation Asia.

Diversification Opportunities for Athena Technology and Generation Asia

0.24

Correlation Coefficient

Athena Technology  Generation Asia

Modest diversification

The 3 months correlation between Athena and Generation is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Athena Technology Acquisition and Generation Asia I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Asia I and Athena Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Athena Technology Acquisition are associated (or correlated) with Generation Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Asia I has no effect on the direction of Athena Technology i.e., Athena Technology and Generation Asia go up and down completely randomly.

Pair Corralation between Athena Technology and Generation Asia

If you would invest  1,140  in Generation Asia I on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Generation Asia I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	33.33%
Values	Daily Returns

Athena Technology Acquisition  vs.  Generation Asia I

Athena Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Athena Technology Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Athena Technology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Generation Asia I

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Generation Asia I has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Generation Asia is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Athena Technology and Generation Asia

The main advantage of trading using opposite Athena Technology and Generation Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athena Technology position performs unexpectedly, Generation Asia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Generation Asia will offset losses from the drop in Generation Asia's long position.

The idea behind Athena Technology Acquisition and Generation Asia I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.